Joe Gruters pitches cryptocurrency reserve as long-term state investment strategy

Editor’s Note: This is a wildly dangerous scheme to move state money into cryptocurrency, which is rife with fraud and abuse by sleazy operators. There is no requirement that any crypto dealer act as a fiduciary, nor is there any backstop such as the FDIC against a total wipe-out of the funds. This is a spectacularly awful idea on every level.

Sarasota Republican Sen. Joe Gruters has filed legislation that would authorize the state to create and manage a cryptocurrency reserve, positioning Florida to invest directly in digital assets as part of its long-term financial strategy.

The proposal is split across two bills (SB 1038, SB 1040). Together, the bills would establish the Florida Strategic Cryptocurrency Reserve within the Office of the Chief Financial Officer and create a dedicated trust fund to hold and manage those assets.

SB 1040 would create the Florida Cryptocurrency Reserve trust fund and outlines its funding sources and purpose. The reserve would receive money through legislative appropriations, revenues dedicated by law and cryptocurrency acquired through purchases, blockchain forks or airdrops. Investment earnings on non-cryptocurrency holdings could also be deposited into the fund. 

The reserve is meant to diversify the state’s investment portfolio and “position the state to participate in and adapt to the emerging digital economy.”

SB 1038 authorizes the Chief Financial Officer, currently Blaise Ingoglia, to manage the reserve and sets guardrails on how cryptocurrency investments could be made. The CFO would only be able to buy cryptocurrency if the asset has maintained an average market capitalization of at least $500 billion over the prior two years.

The bill would also allow the CFO to contract with qualified third-party custodians, liquidity providers and auditors and to make investments in the reserve’s best interest.

The legislation would establish a five-member Florida Strategic Cryptocurrency Reserve Advisory Committee, chaired by the CFO. Other committee members would be appointed and dismissed by the CFO, and would serve without compensation but could be reimbursed for per diem and travel expenses.

The bill requires the CFO to submit biennial reports to legislative leaders detailing the estimated value of cryptocurrency held and actions taken to manage the reserve.

The reserve would be subject to Florida’s sunset review process and is scheduled to terminate July 1, 2030 unless reauthorized or ended sooner. Upon termination, remaining assets would be liquidated and transferred to the General Revenue Fund.

Both bills, filed Tuesday, are contingent on each other becoming law. If approved, the measures would take effect July 1.